A report on the world's Lithium resources and reserves by R. Keith Evans. For a DOC/PDF version of this report, please contact the author.

Saturday, March 29, 2008

MAJOR INDUSTRY CHANGES

At the time of the National Research Council report the production of lithium chemicals was a duopoly in the Western world and demand at that time approximated to 3,200 tonnes/year of Li. Little was known about Russian and Chinese production and reserves.

The two main producers were Lithium Corporation of America (LCA) and the Foote Mineral Company. Both processed spodumene concentrates from their mines near Bessemer City and Kings Mountain, North Carolina.

In 1975 Foote, then owned by Cyprus Minerals, signed an agreement with CORFO, a Chilean Government agency and owner of the mineral claims covering the nucleus of the Salar de Atacama to evaluate the brine deposit there. At the end of the evaluation the company was allowed to lease a percentage of the claims. Sociedad Chileno de Litio was formed and production commenced in 1984. Foote/Cyprus was subsequently purchased by Chemetall and later by Rockwood Holdings.

In 1980, Amax Exploration visited the Salar as part of a global search for potash but on discovering that the Foote agreement granted them exclusive rights for lithium recovery for only eight years pressed for the right to co-produce lithium. In 1984 CORFO invited bids for the development of much of the remainder of the Salar’s nucleus. Amax were successful in bidding against LCA (which, by then had been purchased by FMC Corp.) but Amax, following the completion of an evaluation programme, decided to dispose of its interest and this was acquired by Socieded Quimica y Minera (SQM) a major producer of iodine and sodium nitrate. SQM came into production at the Salar in 1997. The production duopoly was now broken and to acquire market share and with its low costs SQM substantially reduced the price of lithium carbonate.

Having lost the bid in Chile, FMC turned its attention to the Salar de Uyuni in Bolivia but failed in its negotiations with the Government there but successfully negotiated with the Argentinian authorities for rights to the Salar de Hombre Muerto. Although a much smaller salar the brine is an extremely ‘clean’ one and produced a quality of lithium chloride unavailable elsewhere. However, both capital and operating costs were much greater than anticipated and carbonate production was suspended for several years. FMC became reliant upon SQM for carbonate.

The North Carolina pegmatite mines closed with the development of the lower cost reserves in Chile and Argentina.

Another producer Admiralty Resources, plans to come on stream in 2008 from shallow brines at the Salar de Rincon in Argentina.

In the early 2000’s after the evaluation of the very large brine deposits in the Qaidam Basin in Northwest China, a technical breakthrough was achieved in the processing of brines with a high magnesium content. Subsequently, major discoveries were made on the Tibet Plateau. Prior to the brine developments China produced lithium chemicals from domestic pegmatite sources and imported spodumene concentrates.

Since the National Research Council report other low iron sources of lithium ore for direct usage have been developed so now there are three – Bikita in Zimbabwe, Bernic Lake in Canada and Greenbushes in Australia. The last of these attempted to enter the chemical business but failed. Direct usage ores have some significance in chemical demand in that they compete with carbonate in certain applications.